Page 35 - The Insurance Times August 2025

of avoidance of the contract from inception and be able to which, to the modern eye, seems disproportionate to the
retain the premium paid by the insured. breach committed by the insured.

Where a qualifying breach is not deliberate or reckless, the The new Act introduces some new concepts and, along with
available remedy under the Act would have the objective that, considerable uncertainty for example, the concept of
of putting the parties in the position they would have been section 11 of 'whole risk' is a new one and both insured's
in had a fair presentation been made. and insurers can expect legal challenges until the courts
have resolved what this means .Under the new Act, it is
If the insurer is able to establish, on the balance of possible for insurers to contract out of most of the new
probabilities, that they would not have underwritten the risk provisions and therefore the new Act creates only a default
at all, the remedy will be avoidance from inception, with regime. The general view is that the UK Act, 2015 is not
the premium being returned to the insured. satisfactory or final and hence more changes or revisions are
expected.
However, if it is found that the insurer would have entered
into the contract but on certain different terms, other than In India, the Insurance Act is slated to be amended shortly
the amount of premium, then the contract is to be deemed It is the right time for us to bring in a revised regime on
"as if it had been entered into on those different terms. warranties/disclosures in our Marine Insurance Act./
Additionally, if the insurer would have entered into the Insurance Act .If we are to achieve the aim of 'Insurance
contract but the rate of the premium would have been for all' by 2047 ,it would be essential for the Indian
higher (irrespective of "whether the terms relating to insurance industry to fall in line with the global trends by
matters other than the premium would have been the same effecting legislative changes which would replace the
or different"), then the insurer would be able to reduce that archaic provisions the old Acts with a clear, unambiguous,
amount "proportionately "from the claims ,if any. unbiased and customer friendly realm of Insurance law.

The Way Forward Acknowledgements -
It is nearly a decade since the enactment of the 2015UK "Unlocking the Implication of Warranty" by Prof (Dr) Abhijit
Insurance Act and the consequent changes in the UK Marine K.Chattoraj, - The Insurance Times, Vol XXXXV NO 63-
Insurance Act. It had as its central aim the creation of a MARCH 2025
fairer balance between the interests of the insurer and the Supreme Court Cases Cited -
insured. . The 1906 Act was drafted at a time when the
1) "Hind Offshore vs Iffco Tokio General Insurance Co
insurance industry was finding its feet and when there was
Ltd"{(2023) 9 SCC 407)}
a concern about the possibility of deception by the insured.
Consequently, it confers wide-ranging rights upon insurers 2) Rajankumar & Bros (Impex) vs. Oriental Insurance
to refuse claims or to treat their liability as discharged, {(2020) 4 SCC 364}.

IRDAI Reforms Fuel Insurance Boom in India’s Small Towns

Recent regulatory reforms by the Insurance Regulatory and Development Authority of India (IRDAI) are driving a
remarkable surge in insurance adoption across India’s small towns and semi-urban regions. Simplified product approvals,
reduced compliance burdens, and digital infrastructure development have empowered insurers to penetrate deeper
into Tier II and Tier III markets.
Key initiatives such as the Bima Vahak and Bima Vistaar schemes, along with relaxed norms for microinsurance
distribution, have enabled broader access to life, health, and general insurance products. Insurers are increasingly
leveraging local agents, technology platforms, and vernacular communication to educate and engage rural customers.
The impact is visible in rising policy issuance rates and greater awareness about financial protection, particularly among
first-time buyers and women.
Experts view these reforms as a crucial step toward universal insurance coverage and financial inclusion, helping bridge
the urban-rural divide and strengthen India’s social security net. As insurers continue to expand their presence and
customize offerings, small towns are emerging as the next growth frontier for the Indian insurance sector.

32 August 2025 The Insurance Times